Estonia 43 page tax code prosperity doctrine

In the best-selling book The 7 Habits of Highly Effective People, author Stephen Covey wrote about abundance vs. scarcity.   With the abundance mindset, people confidently view the world as full of resources and opportunities... that there’s more than enough to share... and that more success is coming soon.

The opposite is the scarcity mindset, where people view everything as scarce and finite. If you’re winning it’s because I’m losing.  The scarcity mindset reinforces that there’s never enough time, never enough money. And since we can never be sure about the future, we have to ration every last possible resource and grab every bit for ourselves.   This ‘scarcity’ mindset pretty much sums up tax policy in most ‘rich’ Western nations.

In the US, tax revenue as a percentage of GDP has been almost exactly 17.7% of GDP since the end of World War II.    It hasn’t mattered how much they’ve raised tax rates; when tax rates go up, overall tax revenue, i.e. the government’s slice of the GDP pie, stays about the same.   For years they’ve been bleeding cash.  Yet rather than say “How can we support abundance? How can we help set the right conditions to make the PIE bigger,” they punish and intimidate everyone.

The Land of the Free is one of the only supposedly civilized nations in the world where you can be criminally convicted and thrown in jail over tax discrepancies.

They maintain one of the LEAST competitive corporate tax rates in the world, and then blame the companies who have a problem paying that much.

They need the money. There’s never enough. So they’re obsessed with bullying citizens for every last penny they can get their hands on.   It’s classic scarcity mentality.

Thousands of miles away, Estonia is one of the few countries that gets it.

Estonia has reduced taxes to a low, flat rate of 21%. And this number has been falling; from 26% in 2004, it hit 21% in 2008 and has remained at this level since.  One major innovation here is that Estonian companies are only taxed when they actually make a distribution.   In other words, a company that reinvests its profits back into the business pays ZERO tax. Not to mention there are tremendous incentives and financing programs available for startups. So building a business here is definitely a great option.

Plus there’s no estate tax-- the Estonian government isn’t looking for its ‘fair share’ when you die. There’s no gift tax or wealth tax either. It’s Paul Krugman’s worst nightmare.

But perhaps most importantly, the ENTIRE tax code itself is just 43 pages, and filing a return can be done online in just minutes. In contrast, the US tax code could fill entire football stadiums. And tax preparation wastes tremendous resources that could otherwise be put to productive use.

But here’s the incredible thing: Estonian tax revenues, GDP, and standard of living have been rising year after year. And at roughly 10% of GDP, Estonia has a laughably low debt. In fact, Estonia has the LOWEST general government debt of any country in the EU.

In Estonia they have truly worked to make the pie bigger. It’s an abundance mentality, plain and simple.

Now, let’s pretend for a minute that you’re flat, crazy, dead broke. And there’s a guy down the street who really has his stuff together. He has a nice house, he’s saved money, he’s conservative, and he’s doing quite well. Wouldn’t it make sense to learn from this person? Wouldn’t it make sense to spend a little time checking out what they’ve done right, what they’ve learned, and see how you could apply that to your own life?

Sure it does.  But not if you’re the US government. Or France, Spain, Italy, etc. Their only approach is to ignore the obvious success of other countries who have figured it out.  Instead their scarcity mentality pushes them to continue confiscating, intimidating, and terrorizing in a desperate, failed attempt to make ends meet.

It’s quite sad. But this is our reality in the broke and broker USA.

Why the Chicken crossed the road. From many different points of view.

SARAH PALIN: The chicken crossed the road because, gosh-darn it, he's a maverick!

BARACK OBAMA: Let me be perfectly clear, if the chickens like their eggs they can keep their eggs. No chicken will be required to cross the road to surrender her eggs. Period.

JOHN McCAIN: My friends, the chicken crossed the road because he recognized the need to engage in cooperation and dialogue with all the chickens on the other side of the road.

HILLARY CLINTON: What difference at this point does it make why the chicken crossed the road.

BUD MCELHANEY: The chicken crossed the road to escape the over-reaching, confiscatory tax policies of an elitist totalitarian government on the other side of the road!


GEORGE W. BUSH: We misunderestimated the chicken's intentions and now we just want to know if the chicken is on our side of the road or not. The chicken is either with us or against us. There is no middle ground here.

DICK CHENEY: Where's my gun? If the chicken comes to my side of the road he should waterboarded to find out if more chickens are coming and then be killed?

BILL CLINTON: First we need to define the meaning of the words cross and that.   But based on my definition of those two words, I did not cross the road with that chicken.

AL GORE: I invented the chicken.

JOHN KERRY: Although I voted to let the chicken cross the road, I am now against it! It was the wrong road to cross, and I was misled about the chicken's intentions. I am not for it now, and will remain against it.

AL SHARPTON: Why are all the chickens white?

DR. PHIL: The problem we have here is that this chicken won't realize that he must first deal with the problem on this side of the road before it goes after the problem on the other side of the road. What we need to do is help him realize how stupid he is acting by not taking on his current problems before adding any new problems.

OPRAH: Well, I understand that the chicken is having problems, which is why he wants to cross the road so badly. So instead of having the chicken learn from his mistakes and take falls, which is a part of life, I'm going to give this chicken a NEW CAR so that he can just drive across the road and not live his life like the rest of the chickens.

ANDERSON COOPER: We have reason to believe there is a chicken, but we have not yet been allowed to have access to the other side of the road.

NANCY GRACE: That chicken crossed the road because he's guilty! You can see it in his eyes and the way he walks.

RICK PERRY: That chicken crossed the road illegally and we must put up some barrier to stop any more chickens from crossing. 

 PAT BUCHANAN: To steal the job of a decent, hardworking American.

MARTHA STEWART: No one called me to warn me which way the chicken was going. I had a standing order at the Farmer's Market to sell my eggs when the price dropped to a certain level. No little bird gave me any insider information.

DR SEUSS: Did the chicken cross the road? Did he cross it with a toad? Yes, the chicken crossed the road, but why it crossed I've not been told.

ERNEST HEMINGWAY: To die in the rain, alone.

GRANDPA: In my day we didn't ask why the chicken crossed the road. Somebody told us the chicken crossed the road, and that was good enough for us.

BARBARA WALTERS: Isn't that interesting? In a few moments, we will be listening to the chicken tell, for the first time, the heart warming story of how it experienced a serious case of molting, and went on to accomplish it's lifelong dream of crossing the road.

ARISTOTLE: It is the nature of chickens to cross the road.

BILL GATES: I have just released eChicken2014, which will not only cross roads, but will lay eggs, file your important documents and balance your checkbook. Internet Explorer is an integral part of eChicken2014. This new platform is much more stable and will never reboot.

ALBERT EINSTEIN: Did the chicken really cross the road, or did the road move beneath the chicken?

COLONEL SANDERS: Did I miss one?